Market Summary

Yield Movements

Between 2 September and 31 October, yields on local currency (LCY) government bonds in Malaysia rose by an average of 12 basis points across all tenors, driven by the anticipation that Bank Negara Malaysia would keep its policy rate unchanged for the remainder of 2024. On 5 September, Bank Negara Malaysia decided to maintain the policy rate at 3.0%, in alignment with current and expected levels of inflation and economic growth.

Local Currency Bond Market Size and Issuance

At the end of September, the LCY bond market of Malaysia expanded 0.9% quarter-on-quarter (q-o-q) to reach a size of MYR2.1 trillion, driven by growth in both the corporate (0.6% q-o-q) and government (1.2% q-o-q) bond segments. The growth in the corporate bond segment was due to increased issuance at 18.2% q-o-q, while the government bond market was driven by a lower volume of maturities during the quarter. Sukuk (Islamic bonds) remained to comprise a majority of the LCY bond market at 63.6% at the end of September.

Sustainable Bond Market

Malaysia's sustainable bond market totaled USD15.2 billion at the end of September, reflecting 7.0% q-o-q growth in the third quarter of 2024, with sustainability bonds making up 73.6% and green bonds 18.1%. More than three-fourths of the outstanding sustainable bonds were issued by private corporations, mostly with maturities longer than 5 years, while all government-issued sustainable bonds were also long-term.